Unofficial readings on China’s industrial activity released on Thursday add to a sense that the underlying economic vibrancy of the world’s second largest economy may have continued its ebbing trend into October.
This may surprise those who bought into the notion that industrial output rebounded strongly in September, rising to 8 per cent year on year, up from 6.9 per cent in August. In fact, though, that September “rebound” was largely the result of a big statistical base effect, according to China Confidential research.
Similarly, the announcement on Thursday of a pick up in HSBC/Markit’s manufacturing Purchasing Manager’s Index (PMI) to 50.4 in October so far – up from 50.2 in September – is misleading. In fact, readings on manufacturing output and new orders – the key measures of industrial vibrancy – revealed markedly weaker trends. Continue reading »
A jeweller in Surat, Gujarat, has been the talk of the town – and the whole nation – after giving cars and apartments to hundreds of employees.
Savjibhai Dholakia, chairman of Hari Krishna Exports, handed out 500 Fiat Puntos, 207 apartments and 570 pieces of jewellery, according to the Guardian newspaper, which said that he would pay for his mysterious beneficence in installments “over the next few years.”
The scale of Dholakia’s generosity is unusual, but it is somewhat in keeping with Indian tradition. Throughout the country, offices are piled high with hampers of dried fruit and chocolates, gifts from companies to employees and clients, as India celebrates its festival of lights on October 23. Continue reading »
** FT News **
* Hungary to impose world’s first internet tax | Latest unorthodox economic policy of president Viktor Orbán and his Fidesz party
* Drinks with Russian soldiers in Lugansk | Vodka and Celine Dion in the Weeping Willow in eastern Ukraine Continue reading »
** FT News **
* Drinks with Russian soldiers in Lugansk | Vodka and Celine Dion in the Weeping Willow in eastern Ukraine
* Apple chief in China security talks | Cook meets officials after reports that state-sponsored hackers targeted iCloud users Continue reading »
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If there’s one subject on which policymakers around the world seem to agree, it’s that foreign direct investment is a Good Thing.
The annual tables of inward foreign direct investment (FDI) are treated by governments of rich and poor economies alike much as football fans treat rankings in the English Premier League, crowed over by countries in the leading pack and quietly forgotten by those in the relegation zone.
There is no doubt that FDI can do a lot of good: it can add to an economy’s productive capacity and import not just capital but technology, production skills and better management. China, which not only welcomed FDI but witnessed intense competition between different provinces to attract it, stands as a shining example. Continue reading »
India has stepped up efforts to curb nearly 1m tobacco-related deaths a year by issuing new rules to embolden the health warnings on tobacco packets and make the country one of the world’s strictest in terms of tobacco labelling.
But while regulators try to crack down on branded cigarettes and similar products, there is still a vast unregulated market for tobacco in India. And it’s far from clear that slapping warnings on cigarette packs will have much impact on health.
For one thing, many more Indians smoke traditional bidis than branded cigarettes. In addition, a lot of people get their nicotine fix from chewing tobacco and other products often produced in the informal sector. Continue reading »
Blame the Empire.
Venezuela’s socialist President Nicolás Maduro on Wednesday accused the United States of oversupplying the market -in his words, “inundating the market”- to rattle oil prices. His government is maybe having a tough time coping with a sliding crude price as oil accounts for some 95 per cent of export revenues of the energy rich country.
The toxic combination of dropping oil prices, an economy in shambles and lower levels of foreign reserves, has been reinvigorating fears of a debt default. Alejandro Grisanti, head of Latin America economics research at Barclays, said on Wednesday in report titled “Venezuela: The perfect storm”: Continue reading »
For a few days, it appeared that former president Luiz Inácio Lula da Silva had disappeared from the campaign for re-election of his comrade and protégé, incumbent president Dilma Rousseff.
But with only five days left before the second-round run-off on October 26, he reappeared in fine form, ripping into rival candidate Aécio Neves of the centrist PSDB in a speech in Pernambuco, the only state in Brazil’s poor and politically important northeast where Dilma lost in the first round of the elections on Oct 6. Continue reading »
Last month Ricardo Hausmann, a normally mild Harvard academic, set off the equivalent of a financial bomb. The economist suggested that Venezuela had already defaulted on many of its suppliers, its oil service contractors, and its citizens. So who or what might come next?
When Hausmann suggested Wall Street, the market reaction was huge. Indeed Venezuelan bonds, undercut by the falling oil price, have been dropping ever since. Yet it turns out that Venezuela’s latest default has been, in fact, to China. Given that Beijing is one of Caracas’ closest allies, this is surprising. It is also bullish for Wall Street. Continue reading »
** FT News **
* Israeli MP calls for new Palestine models | Naftali Bennett says notion of Palestinian state next to Israel is inapplicable
* Peugeot turnround boosted by China sales | Latin American operations are still struggling Continue reading »
With its hefty energy import bill and high inflation, Turkey is an obvious winner from the drop in oil prices, which economists expect to help improve its current account deficit. But will other troubles neutralize the benefit of lower oil prices?
The country’s energy import bill last year of about $50 bn – roughly equivalent to the size of its 12-month running current account deficit – puts Turkey firmly on the right side of the slide in oil prices, which have declined 25 per cent from this year’s peak in June.
But Turkey’s dependence on foreign capital, which makes it particularly sensitive to changes in global liquidity, could offset this advantage. This dependence led Morgan Stanley to put Turkey in its “fragile five” last year. Continue reading »
By Vladimir Kolychev, VTB Capital
Russian President Vladimir Putin announced this month that Russia should aim to sell its oil and gas for roubles globally, because “the dollar monopoly in energy trade was damaging Russia’s economy”.
This was the clearest indication yet that Russia is serious about its plan to shift away from using the US dollar. Western sanctions against Russia have accelerated this process and encouraged Russia’s close economic alliance with China. Some may question this move but for Russia, a shift away from the dollar makes perfect sense. Continue reading »
** FT News **
* Russia slaps conditions on Ukraine gas | Fears energy stand-off could hit supplies to Europe
* Asia bourses follow Wall Street higher | Solid Japan export data buoy Nikkei, Hang Seng also stronger Continue reading »
The dream of an “Asean car” was first floated, in broad terms, by former prime minister of Malaysia, Mahathir Mohamad, when he spearheaded the creation of Proton in the 1980s. The idea was to form a national Malaysian car company that could be exported to Southeast Asia and beyond.
That didn’t quite work. Proton failed to gain traction much beyond its home market of Malaysia, although it did see some success as a low-priced, competently engineered vehicle in Britain for a time, thanks to the provision of engines by Mitsubishi of Japan.
Now, the idea has resurfaced. Najib Razak, current Malaysian prime minister, has announced that Malaysia and Indonesia plan jointly to develop an “Asean car”. Continue reading »
A broker works at the Mexican Market Exchange
The veteran head of Mexico’s stock exchange, Luis Téllez, has announced his resignation from the start of next year.
The official reason, given in a statement, is that the former minister and member of Mexico’s new sovereign fund plans to “dedicate himself to new projects”.
It is not yet clear who will step into the role as bourse chief, a position Mr Téllez has held since 2009. Under his stewardship, the stock market has developed a flourishing market in so-called Fibras, akin to real estate investment trusts, or REITS, and has just joined the MILA bourse tie-up with Chile, Peru and Colombia. Continue reading »